FATF Launches Targeted Review of Virtual Asset Rules in Major Crypto Markets

The Financial Action Task Force (FATF) agreed at its plenary in Paris, which ended on 30 October 2026, to launch a targeted review of how jurisdictions apply its standards on virtual assets (VAs) and virtual asset service providers (VASPs). The review will focus mainly on jurisdictions with materially important VASP activity, and the FATF will publish initial results in June 2027 and further results in October 2027.

The decision adds a new layer of scrutiny on top of the FATF's regular country assessments. The FATF said that implementation of its virtual asset standards “remains uneven across the global network” and called on jurisdictions to urgently address remaining gaps and deficiencies.

What the FATF Decided

The plenary of 28 to 30 October was the first held under the UK Presidency of Giles Thomson. Responding to the FATF Ministerial Declaration of April 2026, delegates agreed to “significantly accelerate” the effective implementation of the FATF Standards on virtual assets in jurisdictions with materially important VA activity. The FATF said criminal networks are increasingly abusing virtual assets for fraud, scams, sanctions evasion, money laundering, terrorist financing and proliferation financing, exploiting both the cross-border nature of the assets and gaps in national rules.

The FATF will run a new targeted review together with accelerated follow-up processes. According to the plenary outcomes, the review will be based on objective criteria and will select jurisdictions on the basis of their current assessment status. A separate FATF statement published the same day says the targeted review, the follow-up monitoring and an accelerated reporting process are intended to reinforce accountability, enhance transparency and drive timely action. The FATF's mutual evaluation and follow-up processes remain the primary way it assesses countries; the review runs alongside them.

The FATF has not published the list of jurisdictions that will be reviewed. It said it will work closely with them through ongoing engagement, training and capacity-building, and it encouraged donors and technical assistance providers to prioritise support for jurisdictions facing significant challenges in implementing Recommendation 15, the FATF standard that covers virtual assets and VASPs.

Which Jurisdictions Are in Focus

Recommendation 15 was extended to virtual assets and VASPs in October 2018. It requires countries to assess VA risks, license or register VASPs, supervise them for anti-money laundering purposes and apply the Travel Rule on originator and beneficiary information for transfers. Since 2024 the FATF's Virtual Assets Contact Group has published a table on the implementation status of FATF members and of jurisdictions with materially important VASP activity. The FATF said those jurisdictions were identified using two criteria, trading volume and user base, and that inclusion in the table carries no indication, positive or negative, about a jurisdiction's level of risk or compliance.

The FATF's seventh targeted update, published on 16 July 2026, found continued progress, including risk assessments, licensing or registration of VASPs, Travel Rule implementation and supervisory and enforcement action. It also found significant gaps in turning risk assessments into effective mitigation, operating licensing or registration frameworks in practice, identifying persons who conduct VASP activity without a licence and running effective risk-based supervision and enforcement. It highlighted growing risks from industrialised VA-enabled fraud by organised crime, misuse of stablecoins, peer-to-peer transactions through unhosted wallets, offshore VASPs outside effective oversight and decentralised finance arrangements.

For crypto firms, the FATF's assessments of a country feed into how other jurisdictions treat it. The FATF's 2021 guidance, cited on its table page, says jurisdictions may, subject to their own risk assessment, treat VASPs from jurisdictions that do not effectively implement licensing or registration requirements as higher risk.

Other Plenary Outcomes and Next Steps

The plenary removed Bulgaria, Côte d'Ivoire, the Democratic Republic of the Congo and Monaco from the list of jurisdictions under increased monitoring. It expressed significant concern about Vietnam's pace of progress and said it will consider next steps if Vietnam does not make tangible improvements by the next plenary. It updated its statements on Myanmar and Iran, reinforcing its call on Myanmar to address extensive fraud and scam activity. It also approved a report on illicit financial flows linked to scam compounds, to be published the following week, and adopted the mutual evaluation reports of Mexico and the United States, which will be published in December 2026.

The next fixed dates for the virtual asset review are June 2027 and October 2027, when the FATF will publish results. Jurisdictions in scope can expect FATF engagement on their licensing, supervision and Travel Rule frameworks before then. The FATF also plans a Learning and Development Forum on the risk-based approach in Dallas on 1 and 2 December 2026, with a policy statement to follow.